Real Home Value Calculator: Assessed Value vs Market Value

Understanding a home’s true market value is about more than pictures, software assessments and price-per-square-foot. Whether you’re a current homeowner thinking of selling or are house-hunting, it’s crucial you understand what factors affect home valuation. By partnering with a local market expert, sellers will avoid pricing their house out of the market (the kiss of death in real estate) and buyers will ensure they get a good deal on their next home.

So, how do you accurately calculate a home’s value? After all, the value a home is assigned by its town or county and the one it’s given when it’s listed are often dramatically different from one another. Which one is accurate and what does it all mean? Read on to learn more.

Assessed Value vs Market Value: What’s the difference?

When it comes to home value, you’ll often hear two terms, assessed value and market value.

A home’s assessed value is often the lower number of the two, and is the value given by your municipality or county. Investopedia defines assessed value as “the dollar value assigned to a property to measure applicable taxes.”1 Although property tax laws vary, assessors commonly arrive at this number by taking into account the following:

What comparable/similar homes are selling for in your area.

The value of recent improvements.

Income from renting out a room or space on the property.

How much it would cost to rebuild on the property.

A home’s market value, or Fair Market Value, is the price a buyer is willing to pay or a seller is willing to accept for a property. A skilled real estate professional will arrive at the value using a variety of metrics, including:

External characteristics, such as lot size, home style, the condition of the home and curb appeal.

Internal characteristics, such as the number of rooms and their size, the type and condition of the heating or HVAC system, the quality and condition of construction, the flow of the home, etc.

The sales price of comparable homes that have sold in your area.

Supply and demand; that is, how many buyers and sellers are in the area.

Location; that is, the quality and desirability of your neighborhood and other community amenities.

You’ve likely heard the motto of real estate: “Location, location, location.” This means a home’s value relies on its location. While the home and structures on the property will likely depreciate over time, the land beneath it tends to appreciate. Why? Land is in limited supply and a growing population puts increased demand on the housing supply. As a result, values increase.4

Other factors that affect your home’s value include the function and appearance of the property, how well the home and other structures are maintained and whether the home is a lifestyle property, such as a ranch style with mountain views or beach bungalow.

Ultimately, the best indication of a home’s value is the overall supply and demand of the market. This is why we recommend you partner with a real estate professional who takes all of these factors—the assessed value, local market conditions, home features and has physically walked through and experienced your home— into consideration to determine the most accurate market value.

How to determine if a property is comparable to yours.

Both assessed value and market value are partially determined by the sales price of similar, or comparable, homes in the area. To determine if a home is comparable to yours, look for the following characteristics:

Lot size

Square footage

Home style or similar architecture

Age

Location

While you may not find a home with the same exact characteristics as yours, you’ll likely find a few that are close. To account for any disparity, adjust the sales prices of the comparable properties. Look at the differences between your property and the one in question and determine if the differences increased or decreased the sales price and by how much. For example, if your home has two bathrooms and a similar home only has three, estimate how much that extra bathroom increased the sale price of the similar home. The adjusted sale price is the estimation of what the property would sell for if the properties were exactly the same.2

Maureen Moran

All information regarding a property for sale, rental, taxes or financing is from sources deemed reliable. No representation is made as to the accuracy thereof, and such information is subject to errors, omission, change of price, rental, commission, prior sale, lease or financing, or withdrawal without notice. All square footage and dimensions are approximate. Exact dimensions can be obtained by retaining the services of a professional architect or engineer.

All data is deemed reliable but is not guaranteed accurate by the MLS, @properties, or Maureen Moran. See Terms of Service for additional restrictions.

The number of bedrooms listed above is not a legal conclusion. Each person should consult with his/her own attorney, architect or zoning expert to make a determination as to the number of rooms in the unit that may be legally used as a bedroom.

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Doing business as Maureen Moran, Realtor, I recognize that you expect privacy and security when it comes to information that personally identifies you and allows you to be individually contacted ('Personal Information'). I have adopted the following online privacy policy because I understand the need to safeguard the information you may be providing to us at our web site.

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Doing business as Maureen Moran, Realtor, I recognize that you expect privacy and security when it comes to information that personally identifies you and allows you to be individually contacted ('Personal Information'). I have adopted the following online privacy policy because I understand the need to safeguard the information you may be providing to us at our web site.

Online Forms

When you provide me with Personal Information through my various forms, I may use that information to occasionally notify you about important functionality changes to our web site. I may need to know your name, e-mail address, mailing address and telephone numbers so I can be sure to get in touch with you when and how you ask me to. Your information will not be shared or sold to any person or entity.

About Our Cookies

Cookies are small pieces of information that are stored by your browser on your computer hard drive. My cookies allow me to welcome you back to my site and provide you with your personalized home searches. Most web browsers automatically accept cookies, but you can change your browser to prevent cookies from being placed on your computer without your consent. You can still use my regular home search feature and every other function on my site even though your computer will not accept cookies. Cookies, by themselves, cannot be used to discover your identity and I do not know your identity unless you tell us.

Links to other web sites

My web site contains links to and from other web sites and may be in the form of display advertising. I cannot guarantee that web sites other than ChicagoDreamHome.com will respect and protect your Personal Information in the same manner that I do. I urge you to go to and read the Privacy Statements of other web sites when you visit them for your own protection. I am also not responsible for the content of web sites other than ChicagoDreamHome.com.

Your consent

When you provide me with Personal Information, you consent to the collection and use of this information by me for providing services necessary to complete your transaction. If I decide to change my privacy policy, I will post changes on this page so that you are always aware of what information I collect, how we use it, and under what circumstances I disclose it.